Innovation Economy

Saturday, November 8, 2008

What If We Didn't Bail Out the Automakers?

I was reading this morning about the pleas from Ford, Chrysler, and GM to be the latest recipients of a couple billion dollars of government largesse...

...and remembering the time in 2004 that I visited GM's R&D headquarters and listened to their execs diss the potential of hybrid technology. From the piece:

"You always have your early adopters," said Alan Taub, GM's executive director for R&D, about today's hybrid buyers. "Toyota sells as many Priuses as we sell Pontiac Aztecs. Is that a success?" Earlier this year, at the Detroit International Auto Show, Bob Lutz, GM's vice chairman of product development, had said that the company's decision not to make a hybrid car "was a mistake from one aspect, and that's public relations and catering to the environmental movement."

Now, Toyota alone has sold more than one million hybrids, and our indigenous car-makers want a taxpayer hand-out.

I know it'd cause major pain in Michigan (and beyond) if one, two, or three of these companies went under.

But could it also give rise to new kinds of car-makers and parts-makers? If GM went bankrupt, would some private equity firms buy the Chevy Volt project, keep it alive, and do a better job of bringing it to market than GM? Would other manufacturing companies spring up in old Ford plants, hiring former Ford workers? Would more companies like Tesla Motors spring up, and take advantage of some of that existing infrastructure and worker expertise?

I tend to think they would.

But maybe that's because I was at the Bedford, MA headquarters of ZINK yesterday morning.

This is a company that bought all of its intellectual property from Polaroid (and then continued to develop it). Zink bought most of its prototyping and manufacturing equipment from Polaroid (for 50 cents on the dollar). They bought an old Konica-Minolta plant in North Carolina to make their product. (ZINK designs ink-less mobile printers, and they produce the paper used in those printers.) The bulk of their employees once worked at Polaroid.

Would ZINK have ever happened if the government had bailed out Polaroid and kept it on life-support?

Please Visit the New Innovation Economy Blog

You're looking at the old Innovation Economy blog, no longer being updated. The new location is at Boston.com/innovation. (RSS feed is here.) The form below will still get you regular updates of the new blog via e-mail, free!